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Washington, D. C.

The committee met, pursuant to adjournment, at 10 a. m., in room 357, Senate Office Building, Senator Elbert D. Thomas (chairman), presiding.

Present: Senators Thomas (chairman), Ellender, Davis, and La Follette.

Also present: Senator Burke.

The CHAIRMAN. The committee will be in order.

Mr. Tower, will you please continue?


Mr. TowER. I had finished reading the paragraph ending at the top of page 33.

Senator ELLENDER. Mr. Tower, before you proceed with your prepared statement, permit me to ask you a few questions. When we adjourned yesterday afternoon we were discussing the interest that the Iron and Steel Institute took with reference to the Wagner Act while it was being considered by the Congress.

Would you be able to tell the committee whether or not the institute published any paper in opposition to the Wagner Act or against outside unions?

Mr. TOWER. I have no recollection of any publication by the institute at any time relative to the question of unions, as such. I believe at the time the Wagner Act was under consideration by Congress, and representatives of the industry appeared to express the opinions to which we referred yesterday, certain statements were released for the benefit of the press, explaining the position that was being taken by the industry in respect to the points that were being brought to the attention of the Congress.

Beyond that I have no recollection of any statement or publication of any kind by the institute relative to the matter to which you refer. Senator ELLENDER. What is the publication entitled, "Steel Facts"? Mr. TOWER. That is a more or less periodic pamphlet issued by the institute, with which I think probably all of you are familiar because, if I remember rightly, you are all on the mailing list to receive it regularly; in which we undertake from time to time to set forth facts relative to conditions and activities in the steel industry for the benefit of any who may be interested in such matters.

On the average, since the pamphlet was started in 1935, we have published seven issues each year, maybe eight in one year or another. Senator ELLENDER. And that publication, I understand, emanates from the institute and I believe you have a lot to do with the preparation of that document?

Mr. TOWER. I always read all the copy which is prepared for each issue of Steel Facts before it is set into proof. I read each copy of the issue in proof before it is issued.

Senator BURKE. Could I interrupt? I am a little out of touch, being absent yesterday, and as I understand your question, Senator Ellender, it was in reference to the attitude of the institute with which this witness is connected, concerning nonnational unions, independent unions; in other words, local unions?

Senator ELLENDER. And the institute's general attitude toward the Wagner Act before and since its enactment.

Senator BURKE. I was only concerned with reference to the other part. Were you directing the attention of the witness to the attitude of the institute toward independent unions? I was wondering whether that was in support of your amendments which you have offered here, to give independent unions a fair break in their effort to represent employees who prefer to belong to those unions?

Senator ELLENDER. It has some bearing on that, Senator Burke, but what I had in mind was to find out the attitude of the institute as to the Wagner Act before it was passed, during the time it was being considered, and since it was adopted. Is it not a fact, Mr. Tower, that in this publication known as Steel Facts the Institute voiced considerable opposition to the Wagner Act and these outside unions? In order to refresh your memory, permit me to read an excerpt that was later made part of the record in the Civil Liberties Committee of which Senator La Follette was the chairman-exhibit 6327:


Excerpts from Steel Facts, April 1935, page 3, Employees Oppose Wagner Bill as Stifling Representation Plans. Reasons for opposing the Wagner Labor Relations Bill. The main reasons for opposition to the Wagner labor relations bill are voiced by employees and employers in the steel industry at the recent hearings before the Senate Committee on Education and Labor, and may be summed up as follows: It might be well to entitle it as it has recently been characterized as a bill to create trouble. It is vague, it is biased, it is unnecessary. The measure is not a bill whose vicious features could be remedied by amendment, because the whole idea behind it is basically unsound. It would drive a wedge between employer and employee and set up two warring camps. employer who had the will to cooperate with his employees under an Employees' Representation Plan could and unquestionably would be charged by professional labor organizers with sponsoring a company-dominated union. Employees who wished to deal with their employer on the plan of their own choosing might be prevented from doing so because of the adverse interpretation of provisions of the bill. The so-called Wagner labor relations bill as a measure designed to put American workmen under the yoke of national labor unions and to destroy their present rights to cooperate with management in employee representation plans was attacked by representatives of employees and management from steel plants in various parts of the country at a public hearing in Washington on Tuesday, March 29, before the Senate Committee on Education and Labor.

Mr. TOWER. I think that is a reprint of a press release that was based on the representations before this committee at the time the bill was under consideration.

Senator ELLENDER. That opposition of the institute has been maintained, has it not, ever since the Wagner Act has been on the statute books?

Senator BURKE. You are not referring to opposition to the principles of the Wagner Act? I did not see anything about opposition to the principles of collective bargaining.

Senator ELLENDER. I don't know what this language means, Senator Burke, I cannot read it otherwise.

Mr. TOWER. I think it is a correct statement to say that since the constitutionality of the Wagner Act as applicable to employees in the manufacturing industries was established by opinion of the Supreme Court, there has not been any statement in opposition to the principles of the Wagner Act by the institute.

The CHAIRMAN. Mr. Tower, right there may I say this, because of course I was not present at all of those hearings, but is it not a fact that practically every witness who appeared before the Civil Liberties Committee representing industry that had been opposed to the National Labor Relations Act and this law, that the industry had taken the advice of its attorneys and acted accordingly on the theory that the act would be stricken down by the Supreme Court, and is it not true that practically every witness admitted his opposition, his honest opposition, and actually admitted that they opposed in every way possible the act, but when the Supreme Court acted they changed their attitude and realized that the law was constitutional. Now, whether they liked that change or not is not the question. I think that you have echoed today what was the testimony of practically every witness, but all that went on, all that happened before the day that the Supreme Court declared the act constitutional in 1937, in April I think it was, was emphasized as being one kind of an act, and the acts after that were of another kind. Your institute was opposed to the act; it did hope that it would be stricken down, and now you come in with amendments to the act instead of a suggestion that the act be completely stricken, so that your attitude will bear out, I think, all that has been testified to, and if there is a change of attitude, it will show here, but I think that these various questions that are being put to you and will be put to you cannot be questioned because your own friends testified to that. I wanted to just say that as a party to the other investigation.

Senator BURKE. And you thoroughly approve, Mr. Chairman, I understand, of the attitude of any employers who were opposed to any part of the act and who took the position when the act was upheld, that that was the law of the land and whatever their feelings theretofore might have been, that they should go along with it, and I understand that that is the proof.

The CHAIRMAN. It would meet with my disapproval if they took any other attitude. I do not approve of any system, Senator Burke, of the argument that was advanced that an industrialist or anyone else has the right to take the advice of attorneys to deliberately disobey the law. That is quite different from testing the constitutionality of the law, in fact, you would have nothing but anarchy in our Government all the time under such a theory. If 59 different attorneys happened to decide together that the law was unconstitutional, and they all adopted a certain line of procedure based upon that collective opinion, you still have the possibility of the 59 handing down 59 different opinions, and each employer following the advice of his own individual attorney. You would have chaos in the Government. Further, I think that no one can support the judgment of

these attorneys, made as they were, in assuming that they should do any more than to give advice, and when they advised a client to attempt to strike down, attempt to pay no attention to the law they forget that Congress had spoken, and that the congressional word is the last word until it is stricken down. You cannot introduce into our Government direct action anywhere without destroying the scheme of a government by law, and 59 attorneys, great as they might have been, could not give advice which meant disrespect for government, no matter how you try to argue it. That is where the mistake was made. Of course, it was a mistake that persons who become obsessed by their own ideas often make.

Senator BURKE. I do not take issue at all with what the chairman has said about the duty of citizens to obey the law. Of course I think it might also be said here that it was not only the 59 attorneys to whom you referred who felt that the law would be stricken down, but even our lamented majority leader in the Senate, Senator Robinson, was prepared-on the day the decision was rendered-I know of my own personal knowledge, as soon as the decision came down, striking down the law as he fully anticipated it would be, to make his views very clear on the floor of the Senate as to what he thought about the matter at that time.

The CHAIRMAN. Well, making views clear is one thing. Fifty-nine attorneys in their private capacity, advising 59 separate corporations, is still another thing.

I think that under our scheme of government where you have the coordinate branches, that the President and the Congress and the Supreme Court have their rights to speak, and speak in opposition to one another. The fact remains that we have an incident in our history, an incident enacted by those persons who represented the law and who advocated law and order and peaceful processes probably harder than anybody else in our history, actually finding themselves at a given time, because of their particular zeal, either for or against a particular act, finding themselves in action doing exactly what, practically all the rest of their lives, they had opposed. That is what brought the trouble.

Senator BURKE. There is, of course, this difficulty that if the law was passed, which a lawyer or any citizen feels is unconstitutional, he may comply and all who share his view may comply fully with the law, and it will never reach the Supreme Court for test as to its constitutionality. There must be, under our system of Government, the opportunity afforded those who doubt the constitutionality of a law to resist it to the extent of getting it before the Court so that the question of its constitutionality can be passed upon.

The CHAIRMAN. Well, that is all true, but the fact remains that as a result of this decision some corporations spent as high as $500,000 a year in the employment of labor spies.

Senator BURKE. That is bad and unjustifiable.

The CHAIRMAN. And that is the thing which has caused the trouble. Senator ELLENDER. What I was desirous of trying to point out was sinply this, that from the time that the Wagner Act was introduced in and enacted by the Senate and until it was passed upon by the Supreme Court, the institute was opposed to it, and I repeat one sentence here which was published in Steel Facts:

The measure is not a bill whose vicious features could be remedied by amendment, because the whole idea behind it is basically unsound.

Now, today I presume because of the decision of the Supreme Court, the institute now comes and offers amendments, and I am just wondering why those amendments weren't offered when the bill was before the Senate at first, if, as Senator Burke intimated a while ago, the institute is back of the principles of this bill.

Mr. TOWER. I think the probable explanation for the point which you raise is that the proposed legislation was considered to be basically unsound at the time it was proposed because of the then general belief that Federal power did not extend into the field of regulating employment relations in the manufacturing industries; that they were beyond the scope of the Federal power so to legislate.

Senator BURKE. I notice in this statement, Mr. Tower, this one sentence:

Employees who wish to deal with their employer under a plan of their own choosing might be prevented from doing so because of adverse interpretations of the provisions of the bill.

I think whoever made that statement should qualify as a prophet because we have already had presented to this committee, and will have more, striking testimony to the effect that that has happened in innumerable cases in the country where employees have not been able to deal with their employers through representatives of their own choosing. I have in mind now particularly the case of the representatives of the independent union at Crystal City, Mo., who want to deal with their employer, the Pittsburgh Plate Glass Co., in a certain way, and are prevented by the interpretation placed on this act from doing so.

Mr. TOWER. I undertook yesterday, when you were not able to be here, Senator Burke, in commenting upon the position of the institute and the industry at the time the bill was under consideration for enactment, to state that the attitude of the industry was influenced by those apprehensions as to what would result if legislation were enacted, as then proposed, and that since the enactment, and the administration of the bill had worked out, the members of the industry felt that their then fears had been fully justified.

Senator ELLENDER. Mr. Tower, you stated yesterday, I think, that the institute was not responsible for any of the statements made by Sokolsky, but you acknowledged that Sokolsky was employed by your contact man or advertising firm, Hill & Knowlton. You were aware of the fact at the time that you made these payments to your publicity director that Mr. Sokolsky was writing, and that he was working for your publicity director, were you not?

Mr. TowER. May I come back to the whole question that you were laboring to explore, Senator Ellender, and sketch for you the evolution of the publicity activities of the institute and our relationship with Mr. Hill?

Senator ELLENDER. Yes, sir.

Mr. TowER. If you will bear with me I will try to make clear the whole story of that development in the activities of the institute. I will begin at the beginning in order that there may be no step left out.

My association with the institute dates from the autumn of 1933. Shortly after I became associated with the institute I recommended

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